The order for 25 twin-engine A330-300 planes valued at $6
billion includes a variant with increased range that will allow
flights to Europe, said Tony Fernandes, the chief executive
officer of AirAsia X’s parent.

AirAsia X first introduced flights to Europe in 2009,
serving London and Paris, only to drop them in the first half of
2012, saying the older planes it was using weren’t efficient
enough to make the services profitable. A fresh foray will put
pressure on established European carriers including Deutsche
Lufthansa AG, which counts Asia among its most profitable
markets, as well as discount carrier Norwegian Air Shuttle AS.

An AirAsia X entry into Europe “will be painful for
everybody,” said Kenneth Sivertsen, an analyst at Arctic
Securities AS in Oslo. “It sounds reasonable if the forecast
for traffic streams keep increasing.”

The only European budget carrier serving Asia is Norwegian
Air, which began flights to Bangkok from Scandinavia five times
a week earlier this year and aims to add a second Asian base
within five years. AirAsia said it will pay for the planes with
cash flow and debt.

Nobody Waits

“It’s time to really take that next step and build the
equivalent of an Emirates in the low cost arena, Fernandes told
reporters in Paris yesterday. ‘‘The world doesn’t wait.”

Fernandes said his company will build the low-cost
equivalent of Emirates, which has become the world’s biggest
international carrier by grabbing traffic from older operators
with the world’s biggest fleet of Boeing Co. 777s and Airbus
A380 double-deckers.

Airbus aims to keep its A330 twin-aisle jet in production
for another decade as low-cost airlines seek cut-price planes to
introduce long-haul services. The A330 series initially
benefited from a three-year delay for entry into service of
Boeing Co.’s 787 Dreamliner, and continues to find demand from
carriers that don’t need the full range of the Boeing model or
Airbus’s planned A350-900 and want lower capital costs.

Airbus in 2012 announced plans to update the A330 to help
compete with Boeing’s 787 and 777 aircraft. The new variant, due
to enter service in 2015, will use technologies from the A350 to
increase its range and capacity.

Engine Variants

AirAsia X, with 16 planes today, will have 57 planes
including six leased by 2019, Fernandes said, adding that it
will “be back for more.”

The A330 is powered by engines made by Rolls-Royce Holdings
Plc, the most popular variant lately, Pratt & Whitney and
General Electric Co. The airline didn’t say yesterday which
turbines it will take for the 25 planes.

AirAsia X, which listed in Kuala Lumpur in July, plans to
replicate the business model of parent AirAsia by opening
secondary hubs in other Asian cities.

Shares of the airline rose 1 percent to 1.01 ringgit as of
9:25 a.m. in Kuala Lumpur trading.

Budget airlines in Southeast Asia have ordered at least
1,000 new aircraft in the past five years as economic expansion
across the region enables more people to start flying in
countries such as the Philippines and Vietnam.

AirAsia X’s affiliate won rights to use Bangkok as a base
in October and is also seeking to operate out of Jakarta. In its
home base, a new budget terminal is scheduled to open outside of
Kuala Lumpur in May, allowing the carrier and AirAsia to
accelerate growth.

“In this business scale matters, first-mover advantage
matters,” Azran said by phone from Paris. “We want to make sure
we’re ahead of the rest of the competition in the long-haul low-cost carrier space.”